Anyone who has applied for a mortgage modification knows how difficult and confusing the process can be. Most of the delay and confusion is completely unnecessary.

A significant part of the problem is that financial institutions overburden their individual underwriters with an unrealistic number of loan modification files which invariably results in long delays and in the applications going stale. State and federal agencies should consider new rules that limit the number of files that any individual underwriter can have at any given time. Such a requirement would force financial institutions to hire additional underwriters which would result in less delays. Insurance companies that handle claims need to have an appropriate ratio of claims per claim examiner, and why is this not the case with financial institutions reviewing mortgage assistance applications?

Additionally, many times when a financial institution renders a loan modification decision, it provides little or no information pertaining to how the decision was made: what formulas and calculations were used? Was the borrower considered for other types of assistance? How did the borrower fail to meet the requirements for such other types of assistance? Because most financial institutions do not provide any real explanations for their decisions, borrowers are left in the dark and they cannot determine if their applications were reviewed appropriately for the most favorable outcome that they were entitled to under existing rules and regulations. Such omission to provided a detailed analysis leads to unnecessary complaints to regulatory agencies as well as to appeals which result in further unnecessary delay.

Perhaps if the financial institutions were required to use a standardized form that provided an actual breakdown with calculations regarding how they came to their decisions and why the borrowers were not entitled to other forms of assistance, then such requirement would likely result in less delay while also ensuring that the borrowers were receiving the relief that they were entitled to under all existing and applicable programs.

Until the financial institutions are required to set limits on the number of applications assigned to an underwriter and required to provide a detailed analysis regarding how their decisions are made, it will be business as usual with continued delay, and confusion.